Locally controlled forestry enterprises could teach us all a thing or two

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4 February 2015

Four lessons for successful locally controlled forest enterprises from the Forest Connect workshop in Vietnam.

Participants from 26 countries attended the Forest Connect workshop (Photo: Hop Thinh)

In Vietnam, forest management has gradually shifted to local communities, and local forest enterprise development is now seen as a priority by the government to address rural poverty and environmental degradation. This made it an appropriate location for the Forest Connect alliance, which supports locally controlled forestry enterprises, to hold its fourth international workshop in January.

Over four days, 35 participants from 26 countries gathered to learn from countries in both the North and the South about how programmes to organise locally controlled forestry had been implemented. They focused on 12 case studies of successful locally controlled forestry business models from around the world.

Why local control?

The purpose of a locally controlled forest business model is that it is driven by local public interests, not just profit. Its owners are local producers who have a greater democratic interest in the sustainable management of local natural resources, meeting local demand for products and services, and the provision of jobs and income for their families. Money made from the sale of forest products is also returned to the community instead of disappearing elsewhere.

The cases examined, which included timber and non-timber forest products, were all owned and managed by local producers, were economically viable (e.g. not artificially propped up through NGO support), and were socially and environmentally beneficial to their communities.

Lessons for success

So what does a successful locally controlled forest enterprise look like? What lessons does it have for other enterprises? And how can practitioners better support them? These are the lessons that I took away from the workshop.

  1. Effective, transparent and responsible organisation
    Building a responsible management structure to give local producers market scale is key, but the management must also be transparent and accountable to its members, rather than external interests. Separating village politics from the business and its finances was also crucial.
     
  2. Business capacity and marketing skills
    Getting access to training in business development, management and marketing were also key stepping stones for the case studies presented. In many cases, this had helped them to stop being dependent on outside support. It also helped producers negotiate a better price, improve their product and link up with higher value markets. In Ethiopia coffee producers managed to increase prices threefold by cutting out the middleman and improving the quality for the export market.
     
  3. The importance of networks and partnerships
    Working together often also improved the negotiating position of the producers involved. One tropical timber cooperative in Brazil, for example, had taken nearly 30 years to secure tenure rights to a community extractive reserve. Twelve years later the government ceded half of the land to communities not in the cooperative. By organising together, and employing effective negotiation skills, the cooperative managed to fight for additional land, and as a result it is likely to be double in size.

    The Swedish federation of family forest owners also provides a great example. In Sweden, more than 100 years of work to support family forest associations has resulted in 90 per cent of the value of each tree going to local growers. Family forest associations control 50 per cent of forest land, grouped into four major national cooperatives that do all the processing and marketing themselves and sell directly to the domestic and export market.
     
  4. The bottom line also needs to be socially just and beneficial to the community
    Several of the examples revealed support for deeper social values as equity and solidarity among members and the wider community. Business was about more than just the bottom line. Benefit to the wider community was an integral part – unlike the typical capitalist business model.

    In the case of a Teak cooperative in Indonesia, cooperative members were happy for the cooperative itself to make slim profits provided that member farmers received better prices for their timber. Their motto was to shoulder costs evenly, share profits fairly, and prosper together. Here a "continuous effort to nurture trust and solidarity" was seen as key to the success of the business. During a field visit to a cinnamon processing facility in Vietnam, the owner wanted to share success with her community by providing employment or, as she put it, "to absorb such any surplus labour".

The responsibility of success

Most of the case studies presented at the workshop received substantial support during their initial years. Does success come with a certain responsibility to share knowledge with your neighbours (even if they may become potential competitors)?

In Brazil, Coomflona, the tropical timber cooperative is doing just that. Having benefited from substantial support from a government programme and NGO partners, it is now working with the University of Western Parį, to support a new cooperative in the neighbouring extractive reserve with developing timber production.

My impression is that these locally controlled business models are running successful businesses while ensuring other important values of solidarity and equity are not lost. These values are helping shape the type of society that people want to live in – to my mind, something we ought to think more about.

Wouldn't it be great if donors and practitioners could better foster these values? Connecting practitioners and producers through knowledge exchanges and visits, such as this workshop, is one way of ensuring that the importance of valuing solidarity and equity are shared.

These are core functions of the Forest Connect alliance and its partners, and of the Forest and Farm Facility programme, which this autumn will publish a compendium of successful locally controlled forestry enterprise business models to be presented at the World Forestry Congress in Durban.

Anna Bolin (anna.bolin@iied.org) is a researcher with IIED's Natural Resources Group.

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